There is also a recognized civil conspiracy claim in Texas. The general elements for a knowing-participation claim are: 1) the existence of a fiduciary relationship 2) the third party knew of the fiduciary relationship and 3) the third party was aware it was participating in the breach of that fiduciary relationship. 23, 2019) (collecting cases that explain that “Texas appellate courts have routinely recognized the existence of a cause of action for knowing participation in the breach of fiduciary duty.”). denied) (holding wife liable for knowing participation in employee’s embezzlement where funds were placed in joint account and wife benefitted from stolen funds). There is a claim for knowing participation in a breach of fiduciary duty. If the officer or director uses an attorney to set up this business and the attorney knows that new business will be used to usurp opportunities, can the company sue the attorney for facilitating the creation of the new business? What if the attorney is an owner of the new company or works for the new company in a nonlegal position?Ĭertainly, Texas has legal theories that can hold a party liable for participating with a fiduciary in breaching duties owed by the fiduciary. But can the third party also sue the attorney for participating in the client’s actions?Īn officer or director of a company may set up a competing business and direct company business to the new competing business. The third party can certainly sue the client for breaching fiduciary duties. It is not uncommon for an attorney to execute all or part of his or her client’s wishes, which may be in breach of a fiduciary duty owed by the client to a third party.
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